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NewsTranscript
00:00We have Ravi Chakkar, Chief Strategy Officer, who's joining us to give us an update on how
00:06things are faring when it comes to volumes.
00:08Ravi, good morning.
00:09Thank you so much for taking the time out and speaking to us here on NDTV Profit.
00:14Wanted to understand, you know, based on your June updates, the kind of trends that you
00:19are witnessing and what we can expect going forward into this financial year as well.
00:25Yeah, so, you know, we've been maintaining for the last few months that we believe the
00:29economic demand should improve in the second half and we have now been seeing some green
00:34shoots in that.
00:35If you look at the updates shared for the month of June, we have seen an increase in
00:39volume in our flagship LCL business, which is now almost 4% higher than the last year.
00:46It's also sequentially 2% higher over the last month.
00:49On the FCL business, it is a double digit growth on the last year, and it is higher
00:54than the previous month as well, which was also, so it's sequentially last 2-3 months
00:58have seen higher volumes.
01:00Besides what it also means is, if you look at the profitability drivers of our business,
01:05we have described that it is driven by utilization, which is almost 4% higher for the containers.
01:12The other factor is how many 40 feet containers do we use, and that's also 3-4% higher.
01:17So we are seeing an increased demand, and that is allowing us to become more efficient
01:23in terms of operational utilizations, and we believe that should allow us to, you know,
01:27continue to improve the profits in the coming months to follow.
01:30In terms of the future trends, so we have visibility into the next 3-4 weeks of how
01:36the market demand looks like, and that remains on the positive side.
01:40So we believe the momentum and operational improvement as well as in the demand pickup
01:44should continue for the months to follow.
01:47The freight rates also reflect upon the demand in the global trade and the supply of vessel
01:52capacity that also remains strong, and we believe that should largely continue to the
01:58end of the year.
01:59There could be some minor corrections and increases, but largely it will remain range
02:04bound for the next few months.
02:05So overall, we are now witnessing the green shoots and the global macroeconomic environment
02:11improving, and an outcome of that is we saw the U.S. economy had a positive surprise
02:16yesterday, we have seen some of the major economies also are doing in line or better
02:22with expectations.
02:23Europe is still a bit to recover from an economic standpoint, and that may take slightly longer,
02:30but overall, I would say that over the last 6 months, we had been at the bottom of global
02:34trade cycle, and we are clearly seeing the upward trends, and that's reflecting on the
02:38business as well.
02:40So for the quarter gone by, we have seen higher volumes, improved utilization, improved continuamics
02:45as well.
02:46So on the international business, things have started to look good again.
02:49On the domestic business, for the quarter gone by, month on month, there have been a
02:53few deviations, this month was 2% below last month, but overall, the volumes have seen
02:57an upward trend, and we had seen margin improvement in the last quarter, which was on the back
03:03of operational efficiencies, and those have remained intact, so the improved margins should
03:08remain intact or potentially get better.
03:11So overall, from a business standpoint, I would say the company-linked levers are all
03:17performing well, the macroeconomic environment is improving, so we remain optimistic for
03:22the remaining part of the year.
03:23Ravi, hi, it's also Samina joining in.
03:26Tell us, what geographies are doing well for you?
03:28I believe the global piece is now coming together finally, even though I know there is some
03:32uncertainty around what happens in the US in terms of elections, and that usually is
03:36a direct impact on business and hence logistics, but in terms of an outlook, if you were to
03:40paint a picture for F525, where do you see the growth is going to come from, and what
03:44geographies are doing well for you?
03:47So I would say that, you know, India and a large part of Asia is doing well.
03:51We also have seen good growth in the Middle East and Africa.
03:55In the US, things have also remained strong.
03:58I would say with the exception of Europe at large, which has remained weak in terms of
04:02the volume de-growth, other parts of the world have done well for us, and we have also seen
04:07Latin America as a pocket of opportunity where our presence could be significantly enhanced,
04:13and that's been going well.
04:14In fact, earlier this week, we onboarded the new regional leader in Argentina and a strong
04:20commercial team, which has also joined us this week, which basically should allow us
04:25to almost double our business in Argentina, Uruguay and Paraguay.
04:29There are also these small pockets of growth where, you know, we can grow much faster than
04:33the overall growth rate that we anticipate.
04:36So these things come in handy to keep the momentum going for the company.
04:39Right.
04:40Well, fair enough, Ravi.
04:41We leave it at that.
04:42Thank you so much for joining us and giving us that update.
04:45It does mean a lot, and, you know, of course, it will help shareholders further decipher
04:50about the trends going forward.
04:52Of course, you sound certainly positive when it comes to trends going in.